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IMPLEMENTATION OF RFID SYSTEM FOR IMPROVING THE INVENTORY
MANAGEMENT SYSTEM IN UNIJOH SDN. BHD.

Conference Paper · August 2013

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IMPLEMENTATION OF RFID SYSTEM FOR IMPROVING THE
INVENTORY MANAGEMENT SYSTEM IN UNIJOH SDN. BHD.

Khalid Hasnan1, Salleh Ahmad Bareduan2, Azli Nawawi3, Noor Azizah Sidek4

1,3 Faculty of Mechanical and Manufacturing Engineering, 86400 UTHM, Johor

2 Centre for Academic Development and Training, 86400 UTHM, Johor

4 Centre for Diploma Studies, 86400 UTHM, Johor

[email protected], [email protected], [email protected], [email protected]

ABSTRACT - This project focused on the installation planning of RFID system for Unijoh Sdn. Bhd. This
RFID system is intended for improving the efficiency of Unijoh Inventory System. Based on the study
done at Unijoh, it can be concluded that the inventory system of this company suffers several problems
such as slow data key-in (manual), inaccurate record and several occurrence of theft. To justify the
feasibility of the RFID system, a data collection session has been completed and a model and simulation
are constructed. In addition, to justify the amount and specifications of RFID equipments needed, a site
survey and network planning have been implemented. The RFID system will improve the efficiency of the
inventory system by improving the speed of data update and tracking the location of asset in real time
manners. From here, Unijoh will be able to save time and money and the best point is, this project will be
able to offer a low cost RFID system for SMEs.

Keywords: RFID Installation, Inventory Management, Data Entry, SIMATIC RF600

PELAKSANAAN SISTEM RFID BAGI MENINGKAT MUTU
PENGURUSAN INVENTORI DI UNIJOH SDN. BHD.

ABSTRAK – Projek ini memberi tumpuan kepada aktiviti pemasangan sistem RFID di Unijoh Sdn. Bhd.
Sistem RFID ini bertujuan untuk meningkatkan keberkesanan dan kecekapan sistem inventori di syarikat
tersebut. Berdasarkan ujikaji yang telah dilakukan di Unijoh, para penyelidik dapat menyimpulkan bahawa
sistem inventori syarikat ini menghadapi beberapa masalah seperti proses pengemaskinian data yang
perlahan, rekod data tidak tepat dan kejadian kecurian. Bagi mengkaji kebolehlaksanaan sistem RFID di
Unijoh, sesi mengutip data dan pembangunan model dan simulasi telah dijalankan.Selain itu, sesi kajian
tapak dan perancangan rangkaian sistem telah dilaksanakan bagi menentukan jumlah peralatan RFID
yang diperlukan. Sistem RFID ini dapat meningkatkan kecekapan sistem inventori Unijoh dengan
mempercepatkan proses kemaskini data dan merekodkan aktiviti pergerakan aset dengan tepat. Oleh itu,
Unijoh akan dapat menjimatkan masa dan kos. Selain itu, projek ini juga dapat menawarkan sistem RFID
kos rendah bagi memenuhi keperluan Industri Kecil dan Sederhana (IKS).

Katakunci: Pemasangan RFID, Pengurusan Inventori, Pengemaskinian Data, SIMATIC RF600

INTRODUCTION

Radio Frequency Identification (RFID) technology is considered as the next ‘bar codes’. This
technology is expected to be accepted and used globally. RFID technology also offers a lot of
advantages and as a result, a lot of manufacturers, industrialists, distributors and retailers begin
to implement RFID technology in their system. In this decade, RFID technology is not
considered something new as it is accepted almost everywhere. RFID can simplifies the

monitoring of assets, offers a fast scanning mechanism and the ability to read assets in bulks. In
addition, RFID can be integrated with any enterprise existing IT system and this technology can
also provide up-to-date information on status of assets (A. Nawawi, Hasnan, & Ahmad
Bareduan, 2011; A. b. Nawawi, Hasnan, & Bareduan, 2011).

RFID is heavily used in developed countries and this technology is coming fast to our
shores. This technology is already deployed in a big scale by our neighbour, Singapore and the
good thing is, the number of RFID suppliers in Malaysia is increasing. It is also worth to note
that the cost of RFID tag is already at a reasonable level for deploying this technology in
Malaysia. At our best knowledge, the price of a piece of smart label embedded with RFID chip
by Siemens is RM 0.10 per piece (Loo, 2013; Siemens, 2012). This is a good sign for the
growth of RFID technology in Malaysia.

For that reason, this project tends to utilize the advantages of RFID in Small and
Medium Enterprise (SME). Our research group believes that if RFID can bloom in SMEs, it can
bloom everywhere in Malaysia. This is achievable because SMEs are usually the suppliers for
big companies. Currently, global or big companies started to apply RFID in their system
(Angeles, 2005; Baudin & Rao, 2005; Ferrer, Heath, & Dew, 2011; Glover & Bhatt, 2006;
Swedberg, 2013).

KNOWLEDGE TRANSFER PROGRAMME (KTP): RFID INSTALLATION IN UNIJOH

This project is proposed by a research group from UTHM under the Faculty of
Mechanical and Manufacturing Engineering. This group focuses on the implementation of RFID
technology in industry and the analysis regarding the big deployment of RFID system. It is worth
to note that as an RFID system becomes bigger (more RFID readers deployed), the complexity
of the system increases. There are various challenges in a big RFID system such as achieving
optimal RFID tag coverage, avoiding collision between readers, developing a cost efficient RFID
system and maintaining a good load balance for all readers (Ben, Wong, Yujuan, & Li, 2009;
Bhattacharya & Roy, 2010; Chen & Zhu, 2008; Chen, Zhu, & Hu, 2010; Chen, Zhu, Hu, & Ku,
2011; Chen, Zhu, Hu, & Niu, 2007; Leong, Ng, & Cole, 2005; Qiang, Yu, Yiping, & Wenshneg,
2006).

This KTP project intends to encourage the transfer of knowledge between universities
and industries. In addition, it is the students that become one of the main focus group of this
project. It is hoped that the students will be able to improve their knowledge and skills in order to
excel in their career and life development. This project is in operation starting from August 2011.
Along the duration of almost two years, there are several Graduate Interns that contribute a
huge amount of works to this project. The details of graduate interns are as follows:

Table 1: Details of Graduate Interns

No. Name of Graduate Intern Course Project Area Duration of
Covered Service

1 Muhammad Ridzuan bin Master of Mechanical Middleware and January 2012-Now
Idris Engineering & Degree database
of Electrical
Engineering

2 Muhammad Azanis bin Degree of Mechanical RFID Network Jun 2012-Jun

Rahim Engineering Planning (RNP) 2013

3 Mohd Saiful Anuar bin A. Degree of Mechanical System modeling and August 2011-

Ghani Engineering simulation December 2012

4 Noor Fazidah Bte Mohd Degree of Mechanical Hardware and August 2011-

Shah Engineering software integration December 2012

5 The Late Mohd Farid bin Degree of Mechanical Hardware and August 2011-

Gatot Sukatno Engineering software integration December 2012

and test rig

development

The cooperation between the universities and industries provides a lot of benefits for
both parties. In this project, the industry that participate is an automotive alternator
remanufacturing company located in Parit Sulong, Batu Pahat, Johor. The registered name of
the company is Unijoh Sdn. Bhd. This company remanufactures various models of automotive
alternator (refer Figure 1) such as Ford, Mitsubishi, Chrysler, Hitachi, Bosch, Delco and Mitsuba
(Hwei, 2011). The person in charge for Unijoh is Mr.Teo Sze Hwei and he acts as the factory
manager. Unijoh located at No. 9 dan 11, Jalan Sri Sulong 16, Taman Industri Sri Sulong,
83020 Batu Pahat, Johor.

Figure 1: Automotive Alternator (Hwei, 2011)

RADIO FREQUENCY IDENTIFICATION (RFID) SYSTEM

RFID system consists of three main elements (refer Figure 2): a tag, a reader and a
middleware. The tag, also called transponder, is made of a chip and an antenna. It contains a
unique code that provides the unique identification of each object (Aysegul, Nabil, & Stephane,
2008). The reader, also known as interrogator has an antenna which emits radio signals and
receive signal in return from the tag. The distance of the reading range depends on multiple
factors; the frequency that is used, the orientation and polarization of the reader, the
environment (Aysegul, et al., 2008). Lastly, the middleware can provide the primary link
between RFID readers and databases (Fagui & Zhaowei, 2006).

Figure 2: RFID System Components (Elshayeb, Hasnan, & Yen, 2009)

RFID INSTALLATION PLANNING
RFID system offers a lot of benefits if it is planned and installed in a correct way.

Unfortunately, there is also risk of a bad quality RFID system. For that reason, this project tends
to setup the RFID in Unijoh with the ‘first time correct’ approach. Our group performs several
analysis and site survey method in order to setup a good quality RFID system. The
methodology of this project can be referred in Figure 3.

Figure 3: Project Flow Chart

RFID Middleware and Database Validation
RFID technology is widely used globally. In Malaysia, this technology started to bloom.

As a result, our group started to participate in the field of RFID application research since year
2008. This group already conducted several introductory researches regarding RFID technology
and managed to develop the middleware and database for RFID system (Chua Yik, 2009;
Elshayeb, et al., 2009; Hasnan, Elshayeb, & Yen, 2009).

Figure 4: Flow Chart for the Development and Validation of RFID Middleware and Database (A. Nawawi,
Lee, & Hasnan, 2013; Shah, 2011)

For this project, the developed middleware and database is validated. The validation
procedure can be referred in Figure 4. A proof-of-concept is constructed in the Robotic Lab of
UTHM. This proof-of-concept RFID system is used to replicate the parts/items tracking process
in the production line of Unijoh. This system is developed on a SISCOM Assembly Cell-200
(Solution) that is assumed as the real production line in a remanufacturing factory (refer Figure
5). The SISCOM consists of several workstations that can be the representatives of general
remanufacturing operations such as cleaning process, testing process, sending to inventory and
disposal process (A. Nawawi, Lee, & Hasnan, 2013).

Figure 5: SISCOM Assembly Cell-200 with the Representations for each Station (A. Nawawi, et al., 2013;
Solution)

In the proof-of-concept, one RFID reader is deployed at each station. Each part/item is
tagged with an RFID passive tag. Whenever a part pass through any station, its existence will
be detected by the reader and this information will be sent to the database.

This system is a good substitute for manual parts tracking on the production line as the
manual tracking method takes a lot of time and effort. If the amount of parts to be processed
increases, any lost part in the production line will be a disaster because workers have to search
for parts all around the production lines. From here, it is obvious that with the availability of this
system, any missing part can be found easily because its location is recorded in the database.
This RFID system offers real-time asset or part tracking capabilities.

System Modeling and Simulation
Simulation and modeling is a great contribution to knowledge. This branch of knowledge

offers the ability to forecast the performance of a particular system without building the real
system (Kelton, Sadowski, & Sturrock, 2008). This feature is so desirable among decision
makers in any industry because simulation and modeling can help them to minimize risks. The
need for decision making is very crucial for this project and at the best of our knowledge; the
cost for deploying an RFID system is very significant. For that reason, to deploy an RFID
system without a proper forecast and planning is not preferred at all. The procedure for
modeling and simulation is shown in Figure 6.

Figure 6: Flow Chart for System Modeling and Simulation (Ghani, 2011)

A study done by Ghani (2011) shows that with the deployment of RFID system in one
production line in Unijoh, the performance of the system increased. This is due to fact that
workers will not need to search for parts manually. In addition, the condition of particular parts
can be identified with just a glance at a computer screen. Unfortunately, according to Hwei
(2011), the use of RFID for tracking parts in the production line do not offer a very significant
improvement.

In addition, the statement by Hwei (2011) is supported by the fact that the cost of RFID
equipments in Malaysia is not at the level of SME-affordability. Besides, deploying an RFID
system in the production line requires a huge number of RFID readers and antennas. Currently,
an RFID reader cost almost RM 10,000 per piece and the cost of RFID antenna is slightly more
than RM1,000 (Loo, 2013; Siemens, 2012). From here, it is obvious that deploying an RFID
system in a production line of a remanufacturing company is not a cost effective solution.

RFID Network Planning and Equipment Purchase Justification
Upon realizing that our group needs to find a new problem to be solved by the RFID

system, a probing session is implemented. Probing session means the group conducted several
interview and data collection sessions. From the probing session, our group managed to find a
new problem in Unijoh that can be solved using RFID technology. This new problem is related
to the inventory management system. According to one of the employees, the inventory system
suffers several issues such as inaccurate parts records, slow data entry system (manual
method) and theft. In the event of annual auditing and monthly stock check, these issues are
proven to be a very heavy burden. The procedure for RFID Network Planning and equipment
purchase justification can be referred in Figure 7.

Figure 7: RFID Network Planning and Equipment Purchase Justification

The main keywords of this project are Low-Cost-RFID. For that reason, the main aim of
our group is to design and install an RFID system with the lowest cost as possible. To achieve
that, the main contribution of high cost need to be identified. For this project, the main cost
contributors are RFID reader and handheld reader. These equipments cost about RM10, 000
and RM20, 000 respectively (refer Table 2). From here, it is realized that in order to cut down
the cost, the amount of these two equipments must be set to minimum.

Table 2: Equipment Details and Price for Siemens SIMATIC RF600 RFID System (Loo, 2013; Siemens,
2012)

Item Equipment Article ID Quantity Price per
Type Needed Item (RM)

1 RFID 6GT2811-0AB00-1AA0 1 9,818.82
Reader READER RF670R FCC

2 RFID 6GT2812-0GA08 2 1,166.36
Antenna ANTENNA RF640A

3 RFID Smart 6GT2810-2AB03 2 197.90
Label (Tag) SIMATIC RF630L
SMARTLABEL INLAY 54x34 MM; PET

4 RFID 6GT2080-3GA00 1 2,531.07

Software SIMATIC RF-DIAG

INCL: PC ADAPTER, USB CABLE AND CONNECTING

CABLE TO COMM. MODULE

5 Antenna 6GT2815-0BN20 2 1,087.67
Cable CONN. CABLE FOR ANTENNA L20

6 Antenna 6GT2890-0AA00 2 212.38

Mounting Kit FLEXIBLE 3-WAY-MOUNTING-KIT

7 Power 6GT2898-0AA10 1 1,737.63
Supply WIDE RANGE POWER SUPPLY

8 RFID 6GT2813-0BC10 1 19,161.58

Handheld MOBILE READER RF680M FCC

Reader

9 Handheld 6GT2898-0BA00 1 1,086.02

Reader HANDHELD CHARGING/DOCKING STATION

Charging

Station

10 Hand Held 6GT2898-0DA00 1 2,221.63

Reader WLAN-MODULE FOR HAND TERMINAL

WLAN

Module

For the RFID system design, our group decides to implement the system design
mentioned in Swedberg (2013). The system design stated in Swedberg (2013) is considered

very minimal in concept. The design only employs at least one RFID reader to be mounted at
the entrance of the inventory area. Any product or part with tag that move past the reader will be
detected. The RFID system design for Unijoh is shown in Figure 8.

As for the record update, a person only needs to carry an RFID handheld reader around
the inventory area. The person must walk along the aisle and every RFID tag in his/her way will
be detected by the handheld reader. The person must also make sure that every tag in the area
is detected. This method is faster than manual method. Once the RFID tag is detected, the data
will be sent to the database via WLAN communication.

In order to make the cost lower, there are two RFID antennas used at the entrance of
the inventory area (Figure 8). RFID antenna is almost 90% cheaper than RFID reader (refer
Table 2). With this approach, this project only needs one RFID reader. This reader will be
connected to the antennas. An RFID antenna can cover the same amount of interrogation zone
as the RFID reader but it costs significantly lower. The list of RFID equipments needed is shown
in Table 2.

Figure 8: RFID System Installation Planning in the Inventory Area of Unijoh

KTP CONTRIBUTION TO UNIVERSITY, INDUSTRY AND STUDENTS

Contribution to the University
This project offers a good industrial exposure to UTHM staff and students. It is indeed a

beneficial experience in the field of RFID application. In addition, three bachelor degrees (final
year project) theses are produced under this project. As for publication, one paper is presented
in an international conference (A. Nawawi, et al., 2013) and another one paper is waiting for
confirmation to be published in UTHM journal.

In order to strengthen the relation between UTHM and Unijoh, three students were sent
to Unijoh for Industrial Training session. This session provides the most benefit to our project

because these students do some observation and collect some initial data from Unijoh. These
data can be considered as a great start. Other than that, the industrial session also strengthen
the relation between UTHM and Unijoh. From here, more Bachelor projects start to take place in
Unijoh.

Contribution to the Industry

This RFID project offers a better inventory management system for Unijoh. The
inventory records will be more accurate and the data entry session will be much faster. This is
because RFID permits multiple data entry simultaneously as RFID tags can be scanned in
bulks. In addition, with the availability of two RFID antennas at the entrance point of the
inventory area, any movement of parts or products across this point will be recorded. With this
feature, the theft problem can be reduced and finally solved.

In order to gain more information from Unijoh, probing sessions have been conducted.
During these sessions, the employer and employees of Unijoh were interviewed. Despite
helping our group to get more information, the probing sessions can also be considered as a
‘review’ session for Unijoh. In other words, with this probing session, Unijoh will also get some
idea on how to improve their current operations.

Contribution to the Students

The students are the most gainers from this project. This project provides a very good
experience and exposure to the students. Other than developing RFID system for Unijoh, the
students also have the opportunity to improve their communication and other social skills. They
learn how to convince people, proposing suggestions, negotiating solutions and others. In
addition, this project also helps to enhance their critical thinking and trouble shooting skills. The
good thing is, all the skills are proved to be useful as two of the students are accepted as
engineers in Unijoh.

CONCLUSION

RFID technology already reaches its mature point. This technology is already being
utilized in global and big companies. For that reason, this project tends to develop a low cost
RFID system for the SMEs. A good lesson learned from this project is that cost should be the
main variable when developing a new system for SMEs. An RFID system with an affordable
cost is very desired by SMEs in Malaysia.

Our group manages to conclude that with the cost of less than RM100,000, a fully
functional RFID system can be developed for SMEs. The key point is that the basic needs or the
highest priority problems need to be identified at the very beginning of the project. This initial
step is very crucial in order to develop a cost efficient RFID system with an acceptable Quality
of Service (QoS) (Qiang, et al., 2006).

An RFID system offers a lot of benefits and this system should be implemented in
various industries in Malaysia. As more companies deploying RFID, the cost of RFID
equipments in Malaysia will go down. Companies can run their operations in a more systematic
and efficient way. They can have more time to focus on value added activities because RFID
technology will handle all the ‘hustles and chores’.

ACKNOWLEDGEMENT

This project is supported by the Ministry of Higher Education (MOHE) of Malaysia under
the Knowledge Transfer Programme (I-gt/20(UTHM – 11)) project. This group would like to
thank the University and Industry Relations Office of UTHM for managing the official matters of
this project. This group would also like to thank Unijoh Sdn. Bhd. for the great joint-venture and
cooperation.

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